Relying heavily on the Eleventh Circuit’s recent opinion that struck down the individual mandate as unconstitutional, a district court in Pennsylvania held that Congress did not have the power pursuant to the Commerce Clause to enact the individual mandate. Goudy-Bachman v. U.S. Dep’t of Health and Human Servs., No. 1:10 Civ. 763, 2011 WL 4072875 (M.D. Pa. Sept. 13, 2011). The court, decided to sever the individual mandate, along with two other provisions that were “intertwined” with it, but left the rest of the Patient Protection and Affordable Care Act (“ACA”) intact. Judge Christopher Conner, a George W. Bush nominee, wrote the opinion.
Shortly after President Obama signed the ACA into law, the Plaintiffs, a married couple, filed a lawsuit challenging the constitutionality of the individual mandate. The Plaintiffs sought a declaration that the individual mandate, as well as the entire ACA, violates the constitution. The Plaintiffs also sought to enjoin enforcement of the individual mandate. The Defendants include the Secretary of the U.S. Department of Health and Human Services and the Secretary of the U.S. Department of the Treasury.
Earlier this year, the court concluded that the Plaintiffs adequately alleged standing and that the lawsuit is not barred by the Anti-Injunction Act. Both parties later filed motions for summary judgment, but before the court issued its opinion it had both parties file supplemental briefs on the Eleventh Circuit’s recent decision regarding the constitutionality of the ACA. See Florida v. U.S. Dep’t of Health & Human Servs., No. 11-11021, 2011 WL 3519178 (11th Cir. Aug. 12, 2011). The opinion, however, does not mention whether the parties were required to submit supplemental briefs on the Sixth Circuit’s decision that held that the individual mandate is constitutionally sound. See Thomas More Law Center v. Obama, Case No. 10-2388, 2011 WL 2556039 (6th Cir. June 29, 2011).
The court began its discussion by summarizing at length relevant Commerce Clause jurisprudence, and reviewed the recent decisions on the constitutionality of the ACA by the Sixth and Eleventh Circuits. The court concluded that while the recent appellate ACA cases differ in their analyses, they both concur on one significant point: that there is no factually similar precedent that addresses whether Congress has the power under the commerce clause to enact the individual mandate.
After summarizing the relevant jurisprudence, the court “voyage[d] into unchartered territory of constitutional law.” The court began its voyage by stating that the distinction between activity and inactivity is irrelevant for purposes of Commerce Clause analysis. The court went on to find that the distinction between regulating activities by individuals already engaged in commerce and regulating activities individuals who have not yet entered the market is relevant for purposes of Commerce Clause analysis. According to the court, the individual mandate, labeled by the court as an “anticipatory mandate,” falls into the latter category. The court found this distinction to be relevant because it was unable to find a case where a court upheld an anticipatory mandate. The court also rejected the Defendants’ contention that a recent Third Circuit decision upheld a regulation similar to the individual mandate. See United States v. Kufaka, 478 F.3d 531 (3d Cir. 2007).
The court went on to distinguish two Supreme Court cases that the court believed were the “most expansive interpretations of the Commerce Clause.” See Wickard v. Filburn, 317 U.S. 111 (1942); Gonzalez v. Raich, 545 U.S. 1 (2006). The court reasoned that the individual mandate is more expansive than the statutes in those cases because the individuals in Wickard and Gonzales could place themselves beyond the scope of the relevant statute by ceasing to engage in the proscribed activity, whereas individuals affected by the individual mandate cannot escape its reach by ceasing to engage in a specific behavior. After citing approvingly to the Eleventh Circuit’s decision in Florida, the court stated that “[b]efore an uninsured, or self-insured individual’s conduct has any effect on commerce, the individual must first obtain health care services.” See Florida, 2011 WL 3519178, at *49.
The court next addressed the Defendants’ argument that the uniqueness of the nature of and the market for health insurance justified Congress’s use of the Commerce Clause to regulate individuals who have not yet entered the market. The court responded by stating that while the market for health care services is indeed unique, the dearth of Commerce Clause precedent on point prohibited it from holding that Congress can regulate the behavior of those who have not yet entered the market.
Turning to the Defendants’ final argument, the court rejected the contention that the individual mandate is constitional because it is essential to a larger regulatory scheme. The Defendants argued that the individual mandate is essential to the regulation of the health care market, and that it is a necessary and proper means to an end that is pursued under the Commerce Clause. The court responded by adopting the Florida majority’s rejection of this argument in toto. See Florida, 2011 WL 3519178, at *62-66. The court added that the individual mandate is not essential to regulation of the health care market because it only serves as a partial funding mechanism (since the Congressional Budget Office estimated that it would only raise approximately four billion dollars in revenue), and because the individual mandate is “only part of a 907 page statute regulating and reforming the health care market.”
After holding that the individual mandate is not a valid exercise of Congress’s Commerce Clause power, the court decided to sever the individual mandate from the rest of the ACA. The court also severed the preexisting conditions provision and the guaranteed issue provision because the government stated during oral argument that the two provisions are “absolutely intertwined” with the individual mandate and that they must be severed if the individual mandate is severed.
Scott Herrig, University of California, Berkeley-School of Law 2012
